Oct. 4 (Bloomberg) -- A top Senate Democrat is urging
customers to stop doing business with Bank of America Corp. to
protest new debit-card fees, and a House lawmaker is proposing a
measure that could make it easier for them to quit.

Representative Brad Miller, a member of the Financial
Services Committee, introduced a bill today that would bar all
banks from imposing fees on people who close accounts, calling
the proposal a response to the Charlotte, North Carolina-based
company’s plan to charge some debit customers an additional $5 a
month for using the cards.

“As megabanks flirt with menus of new fees, an increasing
number of Americans will want to switch banks,” Miller, a North
Carolina Democrat, said in a statement. “That is the way things
work in a competitive, free market as unrepentant banks are
still trying to rake in vulgar profits.”

Miller’s comments followed more pointed criticism from
Senator Richard Durbin, the Illinois Democrat who successfully
pushed for legislation restricting the amount banks could
collect from retailers for debit transactions and called for. In
comments on the Senate floor yesterday, Durbin called on Bank of
America customers to “get the heck out of that bank.”

The two lawmakers spoke out after President Barack Obama
questioned whether Bank of America has an “inherent right” to
charge the new fee, which the company said was aimed at making
up revenue lost because of the limits on so-called interchange.

Reduce Revenue

Bank of America, the biggest U.S. lender, is joining rivals
including JPMorgan Chase & Co., Wells Fargo & Co. and SunTrust
Banks Inc. in rolling out new charges for debit-card users as
Dodd-Frank Act rules imposed by the Federal Reserve take effect
this month. The limits may reduce annual revenue at the biggest
U.S. banks by $8 billion, data compiled by Bloomberg Government
show.

The new rules cap the fees at 21 cents, plus 5 basis points
of the total and a conditional 1 cent for fraud-prevention,
replacing a formula that averaged 1.14 percent of the purchase
price, or about 44 cents.

Bank of America is already facing pressure from the
European debt crisis and concerns over the legal liability
associated with its mortgage business.

“New regulations on debit card interchange fees -- which
provide no apparent benefit to consumers -- will further reduce
revenue by additional billions of dollars,” Larry DiRita, a
spokesman for Bank of America, said in a statement.

The bank yesterday fell below $6 in New York for the first
time in more than two years. The shares today rose 23 cents, or
4.2 percent, to $5.76 at 4:15 p.m. in New York Stock Exchange
composite trading.

Backs of Customers

“Your decision to charge a new monthly debit fee is an
overt attempt to make even more profit off the backs of your
customers,” Durbin wrote to Bank of America Chief Executive
Officer Brian Moynihan in a letter released yesterday.

Lawmakers and regulators also received a request today from
the Consumers Union, an advocacy group based in Yonkers, New
York, to investigate whether the fee was needed to maintain
business operations or would be used solely to boost profits.

“This fee appears to be unreasonable and unrelated to the
actual cost of processing debit card transactions,” Pamela F.
Banks, senior policy counsel for the group, wrote in letters
that were sent to the members of the Senate Banking Committee
and House Financial Services Committee, as well as the Fed,
Federal Deposit Insurance Corp., Office of the Comptroller of
the Currency and Consumer Financial Protection Bureau.

Closing Fees

Miller’s bill would ban banks from charging closing fees to
customers looking to move their account. The measure also would
require the bank to close the account within 48 hours of
receiving the customer request and limit a lender’s ability to
report negative balances from closed accounts to credit
reporting firms.

As a member of the House minority, Miller would need
support from Republicans who opposed Dodd-Frank to advance his
bill. Durbin said in a conference call with reporters today that
he has no plans to introduce additional legislation.

In response to a question about Bank of America’s plan
yesterday during an interview with the ABC News and Yahoo! Web
sites, Obama said it was his “hope that you’re going to see a
bunch of the banks say this is not good business practice.”

Richard Hunt, the president of the Consumer Bankers
Association, said today that he was “very disappointed” by
Obama’s remarks.

“Recent announcements from banks across the country
regarding new fees for debit purchases and eliminating free
checking are all widely predicted consequences from the
government price controls in the Durbin amendment,” Hunt said.

Durbin pushed to include the debit-fee provision in last
year’s financial-regulation law to cut down on the fees gas
stations, convenience stores and large retailers like Wal-Mart
Stores Inc. and Target Corp. face when they accept debit-card
transactions. The fees can be the second-highest cost the
retailers face after labor.